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[KIT] 7 mistakes that people in their 20s should avoid in managing their finances:
1 – Spending beyond what is possible
2-Do not track spending
3- No clear financial goals
4-No emergency budget package
5- Do not spend time earning money as much as possible
6-No retirement investment package
7- Unable to manage debt
Establish a proper income and expenditure chart that separates between needs, requirements, and savings.
Start today to gain financial freedom.
So How can we avoid it??
Here is the tips: (50%,30%and 20% )
Knowledge of financial management is very important, without a clear division can lead to financial crisis and inefficient spending.
Here are three ways to manage and allocate money efficiently:
1- 50% allocation means taking 50% of the money earned to spend on necessities thing or fees. For example, paying rent, paying the bank, or spending on food.
2- 30% allocation means taking 30% of the money earned to spend on what is needed. For example, the cost of buying clothes or other general expenses.
3- 20% allocation means taking 20% of the money earned to save or make money.
For example, you can take investment.
And for this thing you should understand too because it can help you the difference of Asset & Liabilities.
What is the difference between assets and liabilities?
Assets are something that can earn and puts money in your pocket. Assets include real estate, business, bonds, and so on.
Debt is something that takes money out of your pocket. Liabilities include cars, houses, jewelry.
The house is usually a debt or liabilities Because when we pay in installments with
Bank, we take money out of pocket to pay to the bank, but on the contrary, the house is property when we use the house or the apartment to earn income as a benefit, such as renting to earn income.
And we can earn money and pay it into the bank and get some money back into your pocket, that is our property, not just the house, the car we buy cheaply sold at a discounted price, the remaining deductible is the property. Distinguish between assets and liabilities, Avoid spending money on excessive debt unknowingly.
Difference between assets and liabilities?
1. Assets are something that can earn and puts money in your pocket. Assets include real estate, business, bonds, and so on.
2. Debt or Liabilities is something that takes money out of your pocket. Liabilities include cars, houses, jewelry. The house is usually a debt or liabilities Because when we pay in installments with Bank, we take money out of pocket to pay to the bank, but on the contrary, the house is property when we use the house or the apartment to earn income as a benefit, such as renting to earn income. And we can earn money and pay it into the bank and get some money back into your pocket, that is our property, not just the house, the car we buy cheaply sold at a discounted price, the remaining deductible is the property. Distinguish between assets and liabilities, Avoid spending money on excessive debt unknowingly.
